$10 million construction case has issues homeowner might face

Although the trial over construction of the former PH Towers Westgate encompasses more than $10 million in claims on each side and will span at least a month of court time poring over arcane contract language, some of the issues would sound familiar to a homeowner shopping at Home Depot on a Saturday afternoon.

By Tim O'ReileyLAS VEGAS REVIEW-JOURNAL

October 9, 2012 - 4:00 pm

Although the trial over construction of the former PH Towers Westgate encompasses more than $10 million in claims on each side and will span at least a month of court time poring over arcane contract language, some of the issues would sound familiar to a homeowner shopping at Home Depot on a Saturday afternoon.

As he finished his opening statement on Tuesday in Clark County District Court, Westgate Resorts attorney Robert Schumacher ticked off damaged floor tiles in the valet lobby as one of the construction defects for which it wants reimbursement from general contractor Tutor-Saliba Corp. Had they been installed correctly, the $874,000 repair would be unnecessary, he said.

On Monday, Tutor-Saliba attorney George Ogilvie III had put the onus on Westgate executives, as the project developers, who ordered a grout line only 1/16-inch wide. In doing so, he said, Westgate ignored tile specifications had recommended 1/4-inch, although Tutor-Saliba concluded 1/8-inch would work.

But Schumacher countered that 1/16 worked well throughout the 52-story, 1,201-unit time-share tower connected with the Planet Hollywood Resort and now called the Hilton Grand Vacations. If Tutor-Saliba had done its job, he added, it would have ensured an acrylic-based grout was used in the valet lobby, avoiding problems caused by a sand-based grout.

Likewise, the $2.1 million claim over the major cracks and delamination of the pool deck could have appeared in many backyards on a much smaller scale. Tutor-Saliba pointed to Westgate’s refusal to allow expansion cracks to be built into the deck as the major culprit, while Schumacher blamed “shoddy construction practices.”

But the much larger issue of finishing the project more than three months late stemmed from the fast-tracking practice popular on the Strip during the boom years. Work started on the PH Towers Westgate when detailed plans were only 60 percent complete, a common technique as resort owners pushed to open and start cash flow as fast as possible.

As a result, thousands of change orders poured in during the construction of the PH Towers Westgate, halting some work for months. A central plant that delivers emergency power fell behind schedule while under the control of a different contractor, Ogilvie said. This precluded Tutor-Saliba from testing safety systems, an important part of obtaining occupancy approvals from county building inspectors.

Though completion was promised for Aug. 21, 2009, and did not happen until December of that year, Tutor-Saliba still seeks a $1.5 million bonus for making the best of a bad situation.

Westgate argues that Tutor-Saliba, as an experienced contractor, should have known how to adjust to the change orders and still finish on time. As a result, Westgate has claimed $10.5 million in late penalties.

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